The Kenya Economic Zones Bill, 2026
Status Timeline
Proposed
Active now
Public Review
Pending
Debate
Pending
Executive
Pending
Final
Pending
New Unified Kenya Economic Zones Authority Established
The Bill establishes the Kenya Economic Zones Authority as a unified body corporate (Section 4) to:
- Oversee, coordinate, and regulate special economic zones and export processing zones.
- Map out designated zones and implement investment programs.
- Process licenses and service permits through a centralized registry.
KSh 5 Billion Minimum Investment Set for Licensees
Under Section 36, all developers, operators, and enterprises wishing to carry out business in an economic zone must obtain a license from the Authority. Key terms include:
- A minimum investment threshold of KSh 5 billion (Section 36(6)).
- Licenses remain valid for a minimum period of 10 years (Section 36(10)).
- Decisions on license applications must be rendered within one month.
Broad Exemptions from Taxes, Duties, and Levies
Licensed enterprises, developers, and operators are granted critical fiscal and administrative exemptions (Section 54) from:
- Stamp duty on instruments relating to business activities.
- County government advertisement fees.
- Manufacturing licenses under the Tea Act (Cap. 343).
- Payment of the Railway Development Levy for imported inputs, raw materials, and machinery.
Fines of Up to KSh 20 Million for Regulatory Breaches
The Bill institutes severe penalties under Section 67 to prevent illicit operations within the zones:
- A fine of up to KSh 20 million, three years' imprisonment, or both, for illegal removal of goods in violation of customs control.
- A fine of up to KSh 1 million, three years' imprisonment, or both, for engaging in prohibited activities like unauthorized retail trade.
- Administrative penalties of up to KSh 5 million for failing to maintain proper books of accounts.
Bill No.
No. 46 of 2026
Gazette No.
Supplement No. 179 of 2026
Sponsor
Kimani Ichung'wah
Background
The Kenya Economic Zones Bill, 2026, aims to consolidate the legal and administrative frameworks governing economic zones in Kenya. By establishing a single, unified authority, the Bill seeks to streamline the promotion, facilitation, and regulation of global and local investments. It repeals the separate Export Processing Zones Act (Cap. 517) and Special Economic Zones Act (Cap. 517A), absorbing their functions, assets, and liabilities under a newly consolidated regime.
Key Amendments
- Establishment of the Kenya Economic Zones Authority (Section 4): A single regulatory body governed by a Board composed of a chairperson appointed by the President, several Principal Secretaries, the Commissioner General of the Kenya Revenue Authority, and four private sector experts.
- Declaration of Zones (Sections 24 & 26): Allows the Cabinet Secretary, on the recommendation of the Authority, to declare any area as a Special Economic Zone or an Export Processing Zone by notice in the Gazette.
- Permitted and Prohibited Activities (Sections 29 & 30): Defines allowable zone activities (manufacturing, commercial, and service) and explicitly prohibits retail trade, military equipment operations, and unauthorized residences.
New Obligations
- Licensing Requirement (Section 36): No business may operate within a designated zone without a valid license issued by the Authority, subject to a minimum investment threshold of KSh 5 billion.
- Land Holding Limitations (Section 46): Special economic zone developers and operators must own or lease land within the zone for a minimum period of 10 years.
- Accounting and Reporting (Section 52): Export processing zone enterprises must maintain records conforming to accepted accounting standards and submit returns to the Authority quarterly (by the 14th of January, April, July, and October) and annually.
Penalties
- General Penalty (Section 67(1)): For offences where no specific penalty is provided, individuals are liable to a fine not exceeding KSh 100,000, imprisonment up to three months, or both.
- Prohibited Activities (Section 67(2)): Conducting prohibited activities within the zones is punishable by a fine of up to KSh 1 million, up to three years' imprisonment, or both.
- Illegal Removal of Goods (Section 67(3)): Unauthorized removal of goods from custom-controlled areas carries a maximum fine of KSh 20 million, up to three years' imprisonment, or both.
- Account Maintenance Breaches (Section 67(4)): Developers or operators who fail to maintain proper accounts face administrative penalties of up to KSh 5 million.
Transitional Provisions
- Repeal of Existing Acts (Section 69): Repeals Cap. 517 and Cap. 517A.
- Transfer of Assets and Liability (Section 70): All assets, funds, liabilities, and contracts of the former Export Processing Zones Authority and Special Economic Zones Authority are immediately transferred to the new Kenya Economic Zones Authority.
- Staff Transition (Section 70(7)): Existing permanent and pensionable staff of the former authorities will transition to the new Authority on terms no less favorable than their previous service.
Gazettement
The Kenya Economic Zones Bill, 2026 was published in the Kenya Gazette No. 179 on 2 July 2026.
First Reading
The bill was read a First Time in the National Assembly.